Professional Hourly Rate Calculator
Optional: For Freelancers (add yearly overhead/costs)
Your Estimated Hourly Rate
How to Calculate Someone's Hourly Rate
Whether you are trying to convert an annual salary into a manageable hourly figure or you are a freelancer setting your project fees, understanding the math behind hourly rates is essential for financial planning and negotiations.
The Basic Formula
The simplest way to calculate an hourly rate is to divide the total annual income by the total number of hours worked in a year. For a standard full-time employee, the calculation looks like this:
Step-by-Step Calculation Example
Let's say an employee earns $60,000 per year and works a standard 40-hour week for 52 weeks a year:
- Calculate total annual hours: 40 hours × 52 weeks = 2,080 hours.
- Divide salary by hours: $60,000 / 2,080 = $28.85 per hour.
Factors for Freelancers and Contractors
If you are self-employed, your hourly rate needs to cover more than just your take-home pay. You must account for:
- Business Overhead: Software subscriptions, office rent, and hardware.
- Self-Employment Tax: You are responsible for both the employer and employee portions of social security and medicare.
- Unpaid Time: You don't get paid for administrative work, marketing, or sick days.
To find your "true" rate, add your desired annual profit to your annual expenses, then divide by your billable hours (which are often lower than total hours worked).
Common Hourly Rate Benchmarks
| Annual Salary | Hourly Rate (40hrs/wk) |
|---|---|
| $40,000 | $19.23 |
| $50,000 | $24.04 |
| $75,000 | $36.06 |
| $100,000 | $48.08 |